If you’re considering dismissing an employee, you must make sure that you:
- dismiss for one of the five potentially fair reasons; AND
- take a procedurally fair approach.
In the recent case of Khatoun v Winns Solicitors Ltd, the employer, a firm specialising in road traffic accident litigation, wanted to change the contractual terms of employees to deal with the difficult trading conditions create by the Covid-19 pandemic. If you want to vary terms of employment you should engage with employees in a meaningful way and explore alternatives to dismissal.
Because of the first lockdown far fewer vehicles were on the road and Winns knew its new business would be significantly reduced. The firm therefore asked 365 members of staff to agree to vary their employment contracts.
50% of its staff would be furloughed on 80% of their wages. The firm wanted to retain the other 50%, subject to them adopting the work of their furloughed colleagues and agreeing to a contractual variation allowing Winns to unilaterally reduce their pay by 20%, subject to business needs. It told employees that refusing to agree to the variation would lead to dismissal.
Ms Khatun was an experienced solicitor with a track record of strong performance and could therefore manage the increased caseload. The firm therefore wanted to retain her.
But she did not accept the proposal. The day after receiving notification of her employer’s intentions, she emailed its HR director, saying:
“I am sorry, but I cannot agree to a variation of my contract. I feel that I am continuing to deliver the job I am contracted to, if not more (as I now have double the work to do). These are uncertain times and I do not feel conformable allowing Winns to effectively reduce my pay. In the event that I am furloughed, or any other unexpected situation arises, I will of course consider a variation at that point.”
She was the only one to refuse to the contract variation. The next day she was told by phone that she had been dismissed. Although she was sent written confirmation the same day, she was not given a chance to appeal the decision.
Ms Khatoun complained that she had been unfairly dismissed. The tribunal accepted that Winns had good business reasons for the variation, and therefore dismissing an employee for refusing to agree could fall under the potentially fair reason for dismissal of "some other substantial reason" (SOSR).
The tribunal noted that Winns was a reasonably large organisation with a designated HR department. The firm presented the terms of the variation as non-negotiable and did not engage with employees 'in a meaningful way' about them.
The failure to offer Ms Khatoun a right of appeal was also significant, as the extra time may have allowed for some reflection as to whether an alternative to dismissal could have been agreed.
The tribunal concluded that Winns had acted too quickly in dismissing Ms Khatun only two days after sending her the new terms.
Whilst the reason for dismissal may have been a fair one, the tribunal concluded that Winns had failed to follow a fair process for dismissal, so Ms Khatun succeeded in her claim for unfair dismissal.
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Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.
Copyright © 2022 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.